TECHNOLOGY

Study: Majority of customers will do holiday shopping in-store this year

BY Deena M. Amato-McCoy

Proving that retail is not dead, 87% of customers plan to shop in physical stores this holiday season.

This was according to the “2017 Holiday Store Shopping Report,” from Natural Insight, a provider of enterprise cloud and mobile applications for retail merchandising and workforce management. The report surveyed more than 800 people aged 18 and older, randomly selected across the United States.

According to data, these in-store shoppers will encompass both women and men, aged 45-59 years old. By early December however, 93% of women will have completed the majority of their in-store holiday shopping, versus only 83% of men.

Only 12% of store shoppers expect to spend less than $100 in stores for the holiday season, and 60% of customers will visit stores so that they can touch and see the products before making a buying decision.

Even though they are headed to the stores this holiday season, some shoppers are not looking forward to the experience. In fact, 58% of customers listed large crowds being the top reason why in-store shopping is stressful. Not being able to find what they are looking for was named a close second, according to the study.

“Retailers have an opportunity to make a real impact by understanding why customers shop in-store over the holidays,” said Stefan Midford, CEO of Natural Insight.

“Some people want to get in and out as fast as possible, while others want to browse, get gift suggestions from employees, and enjoy the holiday decor and music,” he said. “In general, we learned that the experience must be personalized to win loyal customers.”

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STORE SPACES

Regional grocery chain operator continues rapid expansion across Florida

BY Deena M. Amato-McCoy

Southeastern Grocers is keeping up a swift pace as it eight new stores in the Sunshine State.

The company will open five new Fresco y Más stores in South Florida, and three new Harveys Supermarkets in West Florida. Among with the strategic conversion of Winn-Dixie stores into Fresco y Más and Harveys Supermarkets, these two brands have become the fastest growing banners in the company.

Fresco y Más and Harveys Supermarket locations emphasize the company’s multi-format approach as it continues to diversify its retail footprint. By listening to customers and evaluating key consumer insights, Southeastern Grocers is also personalizing each banner to provide the shopping experience, products and services that meet the needs of the communities they operate in.

Specifically, the company’s newest banner, Fresco y Más, caters to an ever-growing Hispanic population with amenities such as a full-service Latin Butcher, authentic prepared foods, and Latin-style cafe. Meanwhile, the new Harveys Supermarket stores will provide customers with a personalized shopping experience complete with products fit for their unique community that offer significant value and great prices every day.

“The unprecedented success we have witnessed over the past year at our Fresco y Más and Harveys Supermarket banners is a clear indicator that we are providing localized shopping experiences that resonate with our customers,” said Anthony Hucker, president and CEO of Southeastern Grocers.

“Rather than relying on one store model, we are entrenching ourselves in the communities we serve to better understand each unique landscape, and our customers’ shopping habits,” he said. “More than ever, we are committed to providing our customers with quality, service and value, and the overwhelming positive response from shoppers indicates we are earning their trust as we continue to unveil new Fresco y Más and Harveys Supermarket stores.”

The launch of five new Fresco y Más locations will expand the banner to 23 stores throughout Miami-Dade, Broward, and Palm Beach counties.

Harveys Supermarket’s three new stores in West Florida will grow the banner to a total of 80 locations in Florida, Georgia, South Carolina and North Carolina.

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FINANCE

Kroger Co. outlines new corporate mission

BY Deena M. Amato-McCoy

The nation’s largest grocery store operator is introducing a new plan that it expects will redefine the customer experience.

Kroger Co. reaffirmed its 2017 forecast sales growth of 0.5 to 1.0%, excluding fuel, for the remainder of 2017. Meanwhile, net earnings are still on track to hit between $1.74 and $1.79 per diluted share, including an estimated $.09 for the 53rd week.

This confirmation comes amid growing pressure from Amazon, especially since its recent acquisition of Whole Foods Market has given the e-retailer an even stronger foothold into the supermarket segment.

To fight back, the supermarket operator announced a new program that it expects to drive more engagement and sales.

Called Restock Kroger, the program will leverage the company’s food expertise and data analytics to create new and highly-relevant customer experiences delivered both digitally and in stores. The company will invest an estimated $9 billion in capital investments in the program over the next three years — a move that it expects will generate $400 million in incremental operating margin by 2020.

The program is also designed to generate more than $4 billion of free cash flow over the next three years – nearly double what was generated over the previous three years, according to the company.

“Our goal is to continue generating shareholder value even as we make strategic investments to grow our business,” Mike Schlotman, Kroger’s executive VP and CFO said during the company’s annual investor meeting on Wednesday in New York.

The plan is based on four drivers, from redefining the food and grocery experience and expanding partnerships to developing talent and focusing on social impact. An overarching theme however, will be Kroger’s accelerated commitment to digital and e-commerce efforts, and applying customer data and personalization expertise through its 84.51 customer insights division to even more aspects of the business, including space optimization, pricing and brand growth.

It is also planning a front-end transformation that includes redesigning its front-end, including maximizing its self-checkout presence. This includes expanding its 20-store Scan, Bag, Go pilot to 400 stores in 2018.

Another way Kroger expects to transform the customer experience is by focusing on its Internet of Things sensor network, video analytics and machine learning networks, and complementing those innovations with robotics and artificial intelligence.

In another strategic move, Kroger is also considering putting its convenience store operation on the block. Kroger’s convenience store business includes 784 convenience stores that operate under the banners KwikShop, Tom Thumb and QuickStop across 18 states. It also has 68 franchise operations.

The division has delivered 62 consecutive quarters of identical store sales growth, and generated revenue of $1.4 billion in 2016. However, the operation could experience even more growth under a new owner, according to the grocer.

“Our convenience stores are strong, successful and growing with the potential to grow even more,” said Schlotman.

“We want to look at all options to ensure this part of the business is meeting its full potential,” he added. “Considering the current premium multiples for convenience stores, we feel it is our obligation as a management team to undertake this review.”

The company has hired Goldman Sachs & Co. to identify, review and evaluate the options.

Kroger operates nearly 2,800 U.S. supermarkets. The company also operates jewelry stores, retail health clinics and pharmacies.

 

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